Correlation Between GigaMedia and Sartorius Aktiengesellscha

Can any of the company-specific risk be diversified away by investing in both GigaMedia and Sartorius Aktiengesellscha at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining GigaMedia and Sartorius Aktiengesellscha into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between GigaMedia and Sartorius Aktiengesellschaft, you can compare the effects of market volatilities on GigaMedia and Sartorius Aktiengesellscha and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in GigaMedia with a short position of Sartorius Aktiengesellscha. Check out your portfolio center. Please also check ongoing floating volatility patterns of GigaMedia and Sartorius Aktiengesellscha.

Diversification Opportunities for GigaMedia and Sartorius Aktiengesellscha

-0.81

Correlation Coefficient

GigaMedia  Sartorius Aktiengesellscha

Pay attention - limited upside

The 3 months correlation between GigaMedia and Sartorius is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding GigaMedia and Sartorius Aktiengesellschaft in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sartorius Aktiengesellscha and GigaMedia is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on GigaMedia are associated (or correlated) with Sartorius Aktiengesellscha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sartorius Aktiengesellscha has no effect on the direction of GigaMedia i.e., GigaMedia and Sartorius Aktiengesellscha go up and down completely randomly.

Pair Corralation between GigaMedia and Sartorius Aktiengesellscha

Assuming the 90 days trading horizon GigaMedia is expected to generate 0.64 times more return on investment than Sartorius Aktiengesellscha. However, GigaMedia is 1.55 times less risky than Sartorius Aktiengesellscha. It trades about 0.26 of its potential returns per unit of risk. Sartorius Aktiengesellschaft is currently generating about -0.01 per unit of risk. If you would invest  132.00  in GigaMedia on October 6, 2024 and sell it today you would earn a total of  8.00  from holding GigaMedia or generate 6.06% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	94.44%
Values	Daily Returns

GigaMedia  vs.  Sartorius Aktiengesellschaft

GigaMedia

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in GigaMedia are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, GigaMedia unveiled solid returns over the last few months and may actually be approaching a breakup point.

Sartorius Aktiengesellscha

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sartorius Aktiengesellschaft has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with GigaMedia and Sartorius Aktiengesellscha

The main advantage of trading using opposite GigaMedia and Sartorius Aktiengesellscha positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GigaMedia position performs unexpectedly, Sartorius Aktiengesellscha can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Sartorius Aktiengesellscha will offset losses from the drop in Sartorius Aktiengesellscha's long position.

The idea behind GigaMedia and Sartorius Aktiengesellschaft pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.